Even if the end of an accounting period occurs between the signing of a note payable...

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Even if the end of an accounting period occurs between the signing of a note payable...

Even if the end of an accounting period occurs between the signing of a note payable and its maturity date, the matching principle requires that interest expense not be accrued on a note payable until the note is paid.

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Answer 1

Answer #1

False

Matching principle states that expenses should be recognized once they are incurred. Therefore the accrued interest payable on the note should be treated as liability in the same year

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Answer 2

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Even if the end of an accounting period occurs between the signing of a note payable...

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